Metro Phoenix home prices set record
Pop the champagne. We’re finally there. Metro Phoenix home prices are back to the record hit in 2006.
Actually, the Valley’s median home price soared past the previous record to reach $268,0000 in June, according to the Arizona Regional Multiple Listing Service’s latest research.
The previous record median price was about $265,000 set in June 2006, according to Arizona Regional Multiple Listing Service data.
The housing crash and the Great Recession started in 2007. Phoenix-area home prices hit bottom in September 2011 when the median plummeted to about $120,000.
Housing analysts are still a bit subdued about the Valley’s home-price recovery, partly because it took more than a decade, and the bust was so painful.
“It’s 12 years later, and the Valley’s housing market is in a much better and different place that it was when prices were this high before,” said Tom Ruff, housing analyst
with The Information Market, owned by ARMLS.
Ruff and Cromford Report founder and housing analyst Mike Orr accurately called the peak and the bottom for metro Phoenix’s housing market using pending sales, foreclosures and other key indicators.
“It’s been a long and often unpleasant ride,” Orr recently said about the roller-coaster ride of the Valley’s housing market since 2005.
If you owned a Phoenix-area home during the past 15 years, you understand why the long-awaited recovery of home prices is a big deal.
If you are new to the Valley and didn’t live in an area when prices crashed, let me share a few bad memories.
Due to speculators and bad mortgages with outrageous costs backed by Wall Street, foreclosures in metro Phoenix soared from about 100 a month in 2006 to 4,500 in 2011.
More than half of all homeowners were underwater, meaning they owed more than their house was worth.
Homeowners angry they couldn’t get government-backed loan modifications while Wall Street and banks got bailouts, walked away from Valley houses in record numbers. Some national housing analysts said it would be 20 to 25 years before metro-Phoenix prices recovered. So here’s why I am celebrating.
❚ Valley foreclosures are down to less than 150 a month.
❚ Fewer than 5 percent of all metroPhoenix homeowners are underwater.
❚ Home prices are back to the peak, but not because they climbed 50 percent in a year like 2005-2006. Phoenixarea home values have been steadily ticking up 5 to 8 percent a year for the past few years.
In June, my column “Phoenix home prices keep climbing, but no bubble in sight,” drew a tweet from a longtime Phoenix resident showing his disbelief.
“Heard that one before,” tweeted @RobbieSherwood, a former reporter and communications director for the Phoenix mayor who is now with the Arizona House of Representatives Democrats.
I understand his doubt. Many of us who lived through the crash get nervous when we see prices back up and homes selling so fast they spark bidding wars.
But the differences between 20052006 and now are many. Only affordable homes priced below $400,000 in popular neighborhoods are drawing multiple bids now.
None of the experts is forecasting another big drop in home prices anytime soon.
Tina Tamboer, senior housing analyst with Cromford, expects home prices to appreciate much more slowly and potentially flatten out this year.
She said Valley home prices could even dip next year, but only slightly.
Christa Lawcock of Realty Executives said some homeowners seeing rising prices are talking to her about selling now and renting to cash out at the peak and avoid a housing crash.
“That makes no sense,” said Lawcock, a central Phoenix real-estate agent who navigated the boom, bust and now recovery for many buyers and sellers. “Rents are near record highs and probably more than their mortgages. They aren’t going to find big bargains on homes, even if prices dip a bit.
“We all got beat up by the crash, and now we need to not freak out and make bad decisions when the market is back,” she said. “Please, this isn’t another boom/bust.”